Better Business Bureau of Southern Colorado begins health plan

Colorado Springs Business Journal, Aug 5, 2005 by Marylou Doehrman

Small business owners now have an added incentive to join the Better Business Bureau of Southern Colorado: potential savings on health insurance costs.

The BBB and Las Vegas-based Investment Insurance Savings are offering a medical benefit plan that could save members as much as 33 percent, said Steve Hicks, regional manager for Investment Insurance Savings.

The plan is based on the Internal Revenue Service Section 105 code, which began allowing employers in the late 1940s to reimburse employees for health care expenses, such as co-pays. Section 105 exempts the reimbursements from taxation and permits employers to include the employee payback as a tax deduction.

The BBB plan maintains the same employee deductibles and co-pays as an employer's existing health care plan. The difference is the risk the employer accepts, which makes the plan similar to a health savings account or a self-funded plan.

The risk is not as high as a fully self-funded program, Hicks said. But it's a vehicle to an HSA, he said.

As part of the BBB plan, employers agree to higher deductibles but have lower premiums. They also reimburse employee health care costs to a certain point. Employers pay claims from a reserve fund based on their deductibles. An insurance carrier covers catastrophic care and governs prescription drug benefits.

It's about lower premiums and putting money back on the balance sheet from year to year, Hicks said.

One way to do that is to track how health care dollars are being spent.

Carol Odell, chief executive officer and executive director of the BBB, said that Investment Insurance Services provides analysis of claims and utilization breakdowns for each employer. The data provides a means of determining whether there is abuse or over utilization of the plan, she said.

It makes me think of our workers' compensation program, Odell said. We track the claims, and if there is a problem, workers' comp sends a specialist to train them in a certain area.

The same could happen under the health care plan, only the specialized training might be in wellness areas, she said. It's about managing the plan in such a way that they (small business owners) can keep health insurance for their employees or start giving them health insurance.

The plan is available to companies with two or more employees, and the $500 initial administrative fee is waived for BBB members.

Odell said that while the plan may not be the right choice for all 2,184 BBB members, it does provide employers with another option when selecting health care plans.

We can't afford to do business the way we've been doing it, she said. People have to become more educated on how they handle their insurance decisions.